What matters most is measuring our output of goods and services in a consistent way. Any measurement will be imperfect and miss some black market portion of the economy, but our current system does not reflect how the basket of goods has changed over time nor how the quality and technology have improved. The absolute number matters less than if it is increasing or not. Ideally the measurement system tells us if we are growing overall as an economy and more importantly when divided by population, on a per capita basis. Other indications of our standard of living are what percent of the typical household's after-tax-income do we spend on the basics of food and housing? This varies by location, but if this is increasing it is hard to claim a higher standard of living even with an increased GDP.

It matters in that we need to regularly revise our GDP numbers to reflect changes in the U.S. economy, and changes in how we define economic activity. Perhaps the biggest change is to count both public and private R&D expenditures as business investment (a component of GDP) rather than as an intermediate good (not part of GDP). Same goes for other intellectual property. What the revisions, which occur every four to five years, do not do is change our current economic situation: Economic growth is slower than desirable, unemployment is still well above the "natural" rate of 5 to 6 percent, and real wages are still stagnating.